Wall Street tumbles as tariffs wipe out $700 billion

U.S. stocks plunged Monday, erasing more than $700 billion in market value as investor concern over tariff policy and fresh fears about artificial intelligence prompted a broad selloff. The Dow Jones Industrial Average fell about 823 points, or 1.66%, while the S&P 500 closed at 6,837.75, down 71.76 points, or 1.04%. The Nasdaq Composite slipped roughly 1.13%.

Traders on a market panel described the move as a sharp, immediate reaction: "We’re down more than 700 on the Dow. At least 1% declines across the board." Market participants pointed to two intersecting shocks: the fallout from a recent Supreme Court ruling on tariffs and an abrupt shift in the White House’s tariff posture, combined with renewed anxiety about AI-driven disruption as companies prepare earnings.

Policy statements over the weekend intensified investor unease. President Donald Trump said Saturday that the U.S. would lift the baseline tariff rate on imports to 15%, effective immediately, a change that market participants said forces rapid repricing across import-dependent supply chains. At the same time, the Supreme Court action that effectively undercut earlier tariff protections has left companies and traders uncertain about the legal landscape for trade policy. "The key issue for markets is not just the tariff level itself, but the unpredictability surrounding what comes next," said Daniela Hathorn, senior market analyst at Capital.com.

The selloff hit a wide swath of sectors. Financial and private equity–linked stocks were particularly weak; some private equity-related names fell in the 7 to 8 percent range in intraday trading, and several large banks including Goldman Sachs and JPMorgan traded lower. Consumer-facing and discretionary names also retreated amid concerns higher import costs and slower demand could squeeze margins. IBM shares plunged nearly 13% as investors cited renewed AI disruption worries. Other notable moves included American Express falling about 7.2%, DoorDash down 6.6% and KKR sliding roughly 8.9%.

Market structure and sentiment amplified the drop. Volatility rose and investors sought safety, pushing gold higher as equities declined. The $700 billion headline wipeout, recorded within minutes by market-data trackers, underlines how quickly headline risks tied to trade policy and AI can reshape risk appetite in an environment where valuations are sensitive to policy shifts.

Corporate legal fallout also added friction. Shipping and logistics firms moved to contest tariff exposures, with FedEx initiating legal action tied to tariff refunds, a development that traders said deepens uncertainty for trade-intensive sectors.

Near-term market attention will turn to Nvidia, whose earnings report on Wednesday is being watched as a litmus test for AI-related revenue momentum; Nvidia was a rare green spot on Monday. For investors and companies alike, the episode illustrates how volatile policy signals and technology fears can compress risk corridors, with implications for borrowing costs, hiring and consumer prices if tariffs raise input costs. Until policy signals clear, market volatility is likely to persist as traders reassess profit margins and supply-chain exposure.